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tv   Mad Money  CNBC  January 17, 2014 11:00pm-12:01am EST

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, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your doctor if humira can work for you. this is humira at work. my mission is simple, to make you money. i'm here to level the playing field for all investors. i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money" my job is not just to entertain you but teach and coach you. call me, 1-800-743-cnbc. four times a year they have earnings fever, when hundreds of companies report. when they do, you have to be ready for more than just the headline numbers. you have to know what's known as the expectations and what the
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companies are going to earn or sell. the making and missing of those expectations controlled the market today with the dow climbing 42 points and s&p 500 back sliding and nasdaq declining. a watched it drop like a stone, boom, boom, boom. then we listened to the call and american express is doing better than expected. and the stock rallied $3 and change. investors came into the intel and general electric quarters hoping that industrial sales getting stronger of the intel choose to be far more sir couple inspect and didn't give that positive and general electric talked about a mixed picture environment. and ge sheds 2.28%, the latter seeming out of sync with the fact the headline said things are good.
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with that expectations in mind, let's go over next week's game plan. two of my absolute favorite companies, delta airlines, dal and johnson & johnson. suffice it to say i am a tad concerned like intel because both companies had become victims of heightened expectations. delta has been vocal about how well it's doing and hardly a day goes by -- if they go down you should pick up not delta but american airlines aal, if it's down, i think it's the better and cheaper stock. j and j, as i explained in get rich carefully, it's a stocky believe in for the long haul. let it come in. do some buying. we hear from a company that has about the lowest expectations out there, ibm. it has disappointed so badly. i think they need to layout a positive view of the whole of 2014 to get back on track. the only reason the stock isn't lower is warren buffett. you want diminished
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expectations, does anyone expect anything terrific to happen at coach? the reports on wednesday, frankly i don't think so. you know what? the stock is well off lows and haven't fallen like michael kors. i would be careful with coach. we also get reports from norfolk southern. this one is tough, it rallied about a buck and quarter today. i think it hasn't fallen far enough to watch the potential new found weakness in coal. what might be a compelling buy. united technologies. listen, this company is already tempered expectations at a talk it recently gave. when you have tempered expectations to commercial construction, as united technologies is, i think you've
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got a terrific setup for higher prices because i think commercial construction is coming back. remember otis elevators? we hear from netflix and this stock had such a huge move over the last year and a half it's prone to a big decline. i don't know if the company can wow people enough to get the stock back it its high. they have a history of getting hammered after the port. it reacts and reacts stupidly to the headlines and that might the opportunity to buy as long as it doesn't say in the text of the release that new found competition is hurting signups or that a recent ruling about heavier users like netflix having to pay higher transport fees will cause it to raise prices and lose customers. it's down 10% already. any swoon after the headline where the story is okay, that could be a reason to buy. one more controversial name reports after the close and
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that's ebay. here's a company that had multiple firms say negative things about its growth and yet its stock hasn't fallen. i typically do not like those setups what you want is to have the stock beaten up before the quarter. if the news is as bad as the analysts make it out to be the stock won't have further to fall. unfortunately that is not the case. could be a little dangerous. thursday has a host of big capitalization companies reporting but lockheed martin and mcdonald's and microsoft and starbucks. >> lockheed martin, you hear the wonderment in my voice when i talk about it. they had to cover shots for the most part but it's a juggernaut. the stock almost seems like -- i know this is a karma term, but like a destiny stock. it doesn't make sense but it's trade that way. i wish i could say the same thing about mcdonald's, they have gotten on the wrong side of
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history, other side of my big rich theme, desire by more and more people to eat healthy and avoid the food chain. for many mcdonald's represented the corrupted food chain itself. the good news, there's take resiliency in the low 90s that's surprising. it just doesn't want to get cracked below 93. but you know what, i think wendy's is the horse to bet off in the fast food race, not mcdonald's, i've been right. i would not change horses in mid burger. microsoft is an odd duck. i don't know a sole in it for the earnings, judging by intel's performance won't be that hot. they are in it to hear who the new ceo will be. insider ceo would knock the stock back all that much, even though it would be disappointing. i think it's a good one. starbucks is difficult here. we know howard shultz recent talked about the company not being immune, not immune to the
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rapid decline in mall traffic. nevertheless, they have a giant gift card business. robert gave it to me and i use it all the time. i take a longer term view here. i think starbucks is a buy on weakness but i think you'll see that weakness. on friday we get to hear from the bristol-myers, embraced biotech like no others, i think they should have an excellent quarter. stanley black and decker reports also on tuesday. i don't believe it could as who rid a quarter as the last time it reported. stock could be a turn at hand. how about buying 75 calls, maybe some march out, go out a little bit. kimberly clark an honeywell
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report. it's been a little cryptic about it but i think it will bring out a lot of value. stay tuned and i'll show you how the spinoffs has to be followed by you. and last but not least, how honeywell did in the fourth quarter. they keep coming back to my chapter about the bankable 21 executives whom you should want to invest with because i know them to be stand-up like the coach, might want to be invested with in a football team. i'm talking about visionaries, suffice it to say, i'm not selling and the trust will not sell any shares of honeywell going into the quarter. remember the bottom line, the expectations control and be cautious. if it's gone down already like american express had, that might be the terrific opportunity on your hands. i want to go to don in
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california. >> caller: hey, this is don in sacramento. >> i was interviewed by the sacramento bee they were tough on me. >> caller: the book is great, you have an uncanny stuff for explaining the stuff in layman's terms so we can understand it. >> quite welcome. >> caller: i have a position in csx and it's been good this last year i'm wondering, want to buy another block. >> i think you have to let it settle down. i was a little downbeat, they really didn't see the next step down in coal. they didn't see it. that was a very tough conference call. i advise you to read it. i think you'll agree with me. call it the game of expectations, that's what in control and what we're going to see play out all next week. "mad money" will be right back. coming up -- playing games. take two interactives grand theft auto 5 broke records when it debuted racking up a billion dollars in first three days of
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sales but gamestop's disappointing report this week was cause for concern. is it still game on? cramer has got take two's ceo. and rise of the machines? looking for a play on heels of google's multibillion dollar foray into gizmos for the home. cramer zeroing in on the name that might be the cross hairs and spirited stomp, surging over 25% over a takeover announcement. wish you were in on the spirited move? find out the potent way to profit from this story just ahead all coming up on "mad money." don't miss a second of mad money follow jim cramer on twitter. have a question, tweet cramer. send jim an e-mail to or give us a call at
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1-800-743-cnbc. miss something? head to to prove to you that aleve is the better choice for him, he's agreed to give it up. that's today? [ male announcer ] we'll be with him all day as he goes back to taking tylenol. i was okay, but after lunch my knee started to hurt again. and now i've got to take more pills. ♪ yup. another pill stop. can i get my aleve back yet? ♪ for my pain, i want my aleve. ♪ [ male announcer ] look for the easy-open red arthritis cap. of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more.
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dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪
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♪ this magic moment at a company that's bringing media and technology together. next is every second of nbcuniversal's coverage 0f the 2014 olympic winter games. it's connecting over one million low-income americans to broadband internet at home. it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal.
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we're standing in the middle of a brand-new video game console cycle. the stocks of the video game makers don't seem to reflect the strength, not in the least, even though new consoles always mean boost in game sales over the next couple of years. some of that is because gamestop just imploded and so did best buy. but in both of these cases the stocks had gotten too high after repeated analyst upgrades. however, i don't think the video game maker sure penalized because of the weakness in gamestop and best buy. these days half of all spending takes place over the internet where you can download the game right to your computer or console. why go to the store when you can get it from the web? my favorite video game maker and the company behind grand theft auto five, most successful game in history, it's almost absurd. it came out on october 17th and
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then october 29th the company reported a blowout quarter, colossal earnings and next day it was trading at 17. and that quarter only included two weeks of grand theft auto. fast forward to today it is $17.05. take two is a 1.5 billion and should have had 1.5 billion on the cash sheet and they have a number of big franchise behind grand theft auto bioshock, max payne, borderlands and sports simulations and major league baseball 2k, they have been successful but the stock hasn't been rewarded for that success yet. it's absurdly cheap here. let's check in with the chairman and ceo of take two. welcome to mad money. >> good to see you. >> you've got to admit it is a bit of a puzzle, billion dollar opening over a weekend, if it were a movie and lion's gate the
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stock would go up 20%. i'm trying to figure out the disconnect. >> i've never seen a ceo who didn't think his stock was undervalued, i'm fond of saying don't look what i say but look what i do. we brought back -- so clearly we voted with our capital that we believe the stock is a value and what is the market missing? it's hard to know. the market may still believe we're just about grand theft auto. it is the standard bearer, we do have a lot of other great titles. >> in the conference call you said in that quarter about 8% of revenues from digitally delivered games. >> you're going to swap digital offerings but in a prior quarter with had as much as 30%.
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and we are a leader in the space, first ones to put out downloadable content digitally and do it all over and over again. >> let's figure out the psyche, if it was disney and had you pirates of the caribbean 17 or star wars 7, they would kill to have a billion dollar weekend. how can you have a billion dollar weekend? what does it take? what's behind it? >> we had a little bit of a leg up because of our average selling price. in the u.s. it's roughly $60, much more than that internationally. the billion dollar number is real it looks better because it takes fewer units to get there. we did have 29 million people vote with their dollars to buy that title in six weeks.
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>> let's figure that out. i go to my kids and i didn't want them to have it. didn't want them to have it but i know their friends have it. a lot of people had to ask their parents for that money. parents don't mind? >> well, remember, this title really is meant for people 17 and above. >> right. >> if parents are buying it they are buying it for young adults or people with credit cards already. for nba 2 k, yeah they are buying those because they are meant for everyone. >> explain why gamestop is not a forward indicator for your business? >> you called it already. first of all. a lot of our business isn't generated at retail. gamestop is an important partner but they are selling a lot of current gen properties, what is now old gen because we launched xbox one and ps4. a big part of the sales is old gen, it's a leading indicator. >> that's important because people were confused by that. if you wanted to take an extension, let's say i'm cbs and
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can say, you know what there are characters in here, i could have multiple shows -- maybe fx, why hasn't a network bought you? >> why haven't they actually bought us? >> probably an interview for another take. in terms of what we would do in other media, this is such an important medium and such a reactive medium and we can make so much money in this medium, we're not induced to license our property to other people. >> now, when i go through the analysts who i think are kind of saying what is the story here crt capital just today, their piece is very positive. fair value, but they say limited visibility into coming release, beyond management statement that take two has more than ten titles developed for next gen consoles. how come they don't? >> we just announced evolve, a title coming from the 2k label for next gen consoles and we've put out nba 2k for next gen so they can safely assume that's coming and wwe is coming. in terms of other titles, we
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leave it to labels to make that announcement because it's a marketing decision. if i'm here on financial news television talking about titles, by the time the consumer hears it's old news. >> one last question when we play need for speed and -- >> that's not one of ours. >> i know. the reason i mention it, i've always felt, i asked the company who it is, why am not seeing signs for mcdonald's and coca-cola when we drive around. it's too small. is it too small to get advertiser? >> we do have advertisers in our sports game. if you're playing nba, you will see the kind of advertisers would you see watching on television or at the game. i don't want to speak for our competitors. i do think there are times when it's natural to be placed that you want to place a product and
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we get paid and make money doing it. is it a big number? they are right, it's not a huge number. >> i've got to tell you, it is a great mystery why your stock is priced where it is and i know carl is not there anymore, he should have held on. your stock should be higher. i'm just going to say. sometimes we reach that conclusion. >> if we keep doing a good job, it should happen. >> fair enough. chairman and ceo of take two. look what they have. they've got the franchise. the franchise itself is worth the price in stock. grand theft auto. coming up -- ever think you could clean up from an idea straight out of the jetsons? don't move. cramer has a play that could be a robo buy.
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[ male announcer ] the beautifully practical and practically beautiful cadillac srx. lease this 2014 cadillac srx for around $319 a month with premium care maintenance included. ♪ this market has been invaded by robots. i'm not pitching a brilliant premise for a bad dr. who episode. i'm talking about real robots thanks to google's robotics related shopping spree. they make smart thermostats and acquired eight different robotics companies in the last six months, including boston dynamics that designs incredible robots for the pentagon, like a robotic mule that can carry up to 400 pounds and walk easily over rough terrain.
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andy ruben, is running the show when it comes to robotics and now it seems like he's actually trying to build a real android. amazon is getting in the game too. they bought a company called kiva and now amazon is using 1400 robots to move inventory around in warehouses. they could shave 20 to 40% off the cost of fulfilling orders. the unions seem to be worried. then there's the aerial drone delivery program although it will be difficult before that will come to fruition. let me get to the point. google believes in robots, smart company. amazon believes in robots, smart company. should you believe in robots too? we got a call from buy an in maryland asking by irobot by which he meant the stock irbt, and not the movie with will smith. the robo cop remake coming out in three weeks, i didn't like the trailer.
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i thought it would be a time to get back to him. i robot the only pure play robotics company out there. because it has a market cap of $1 billion, it means you won't be able to get ahead of yourself in after hours trading. the products are month prosaic than the things we've seen at google and amazon. but that hasn't stopped the stock from roaring hard. it rallied 85.5% last year. all on this chatter, even better than the red hot 3d printing names everybody loves. even after this run, i actually still like the stock, especially into the kind of weakness today. it was down $1.37. they make consumer robots, they are the guys behind the roomba robotic vacuum and scuba, which preps washes and scrubs any hard surface as well as the luge, that clean the gutters respectively. remember "breaking bad", the post party living room filmed from the perspective of the vacuum, that's the roomba. the company sold over 10 million of these things since 2002 and they are currently found in more than 45 countries.
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i'm still using one of those old vacuums when i vacuum my house -- all right. okay, maybe not lately. the other 10% of the business comes from against and security. they make small robots to be used to reconnaissance and surveillance. it has gotten smart smaller since we've gotten out of iraq. it should stabilize, it's one of the reasons why they did get hit for a while. the company has gotten into health okay, what's called telemedicine where the robots allow doctors to observe and diagnose patients in a particular hospital. it is a cost saver because they can navigate from patient to patient on its own. the need for any kind of technical setup or assistance
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from the staff or nurses or any of the staff. at the same time i robot is using a mobile video conferencing where they partner up with cysco. you can control it from an ipad. it will go where you tell it to and recharge when the conference is done. i think it's pretty cool. won't be a meaningful revenue source in 2014. next year they expect to move the needle. another thing now irobot all about home robotic division. here the company came out with a
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new roomba model. the roomba 800, an entirely 50% more efficient cleaning system and less maintenance and a floor mopping robot because it's been such a strong seller. they just released in brava, and the company has a very strong intellectual company portfolio and on top of that there's not a ton of competition and irobot has the best brand recognition in the space. the last time the company reported in october the results were not so hot. they come in two cents better than expected but the revenues were weaker than anticipated and irobot's guidance for the fourth quarter was below what wall street was looking for. that's bad, right?
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stock got clobbered 4%. but you know what happened? irobot rebounded like crazy the very next day. rallying 8% because as people went through the quarter they realized it wasn't as bad as it first appeared with the home robotics division doing pretty darn well when you look beyond the headline numbers. that's called de-risking and i love the de-risking of a stock. and then 28% revenue growth in fourth quarter. and if management can deliver on those numbers and i believe they can, then this stock is well worth owning. irobot does look expensive, however the company has over $5 in cash, that's not bad, that's net cash. when you back out the cash the stock is only selling 27 times earnings which is more reasonable given the fact they should be able to grow revenues in the mid to high teens. i don't want you to get carried away by the hype surrounding
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robots, irobot is not necessarily a revolutionary company, but i think the stock is worth buying for speculation as well as you're careful and brian in maryland, you've got horse sense. can i go to mike in virginia, please? >> caller: i want to hear your thinks on -- thoughts on xon. >> i get odd ball ones when i sign books. i looked at this -- someone at costco asked about it. it was a dna play, what i felt -- it was right after intercept, i bless it but then the stock moved up another huge percentage. you've got to start being careful. we've got to start being careful. can i go to carmen in connecticut, please? >> caller: hi, jim, thanks for everything. i've had a small position in fire eye since it became public and done well.
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i want to add to the position but i'm not sure if i should wait for pull back or just getting started. >> it's up 68% this year. i mean, look, i'll say i don't want to buy it then it will go up another 5 points and i'll regarded as a war criminal. but i've got to have some -- some conscience, i'm not going to tell you to buy a stock after a 68% move in a couple of weeks. robot revolution, seems like it's all the rage, i don't want you getting caught up in it. exciting, yes, but do your homework and remember, mr. roboto. there's a new form of innovation taking shape.
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at a company that's bringing media and technology together. next is every second of nbcuniversal's coverage 0f the 2014 olympic winter games. it's connecting over one million low-income americans to broadband internet at home. it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal.
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it is time for the lightning round! are you ready ski daddy? time for lightning round. starting with carlos in florida. carlos. >> caller: how are you doing? >> not bad. how about you? >> caller: booyah. $11, it's been going up and been going up. i want to know your take? >> it's a decent bank but i think bank of america is better than that and that's why i want you to be in bac. can i go to dave in new york. >> caller: jim -- >> what's up. >> caller: dry -- >> they fell from 2,000 down to 1300 have you looked at nordic american tank?
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they have moved up from 10 to 11. if that pulls back it's going to be nordic. the rates have finally gone up. that's oil, not bulk, stop explaining i don't know what i'm talking about. rob in california. >> caller: how is it going? mdrx. >> i think it had a big spike. this is one that could pull back. some people are saying taking business and i have not seen that yet. let's go to john in florida. john? >> caller: seaspan. >> i think they can be involved in the great oil migration from my country to others. >> bob in arizona. >> hello, jim, big fan. >> what's up. >> caller: what's your feeling on sherwin williams going forward and what book stores debuting your new book? >> i do like sherwin williams because it's a housing plan. i want to be sure on the seaspan i just mentioned, that is the container ship like dry ship, not as good. focus on nordic american tank. let's go to allen in florida.
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allen. >> caller: hi, jim. so nice to talk to you. i hear you and see you so many times person to person nothing like it. >> thank you. >> caller: i'm calling from boynton beach, florida, just moved here, originally from long island, new york. i'm going to be a resident here. on march 27th, 2013, you said buy diana shipping and i bought 300 shares and selling at $12.29 and yesterday it was $13.28. that is the best container place. dry ships is the spec and diana is the best. the sea is okay, nordic is the best of the oils. you're in a good one, hold on to that and that ladies and gentlemen is conclusion of the lightning round.
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i have nine smoke detectors around the first and second floor of my house. i can never figure out which exactly is it dying. i go from detector to detector and i don't have my contacts in, which one, which one? >> thank you for taking my call. >> i've been up since 2:30. i couldn't sleep. what's up. i know there's supposed to be some light flashing saying it's the one but i can't even see the darn thing. [ beeping ] >> where is it written that batteries can only die and chirping can only begin between 2:00 a.m. and 4:00 a.m. >> jim, happy new year and new book. >> you're terrific, thank you so much. >> i really love your new "get rich carefully" book.
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>> 400 sold this weekend in costco. >> one guy is not paying attention, he's reading your damned book. >> you're looking dapper on the front cover. nice choice in suits. >> that's a nice one. i had ten suits, they picked that one. there was 3,000 pictures taken, maybe the biggest waste of time i ever had. >> have you noticed the weight i lost. i have abs made of steel. these are 33 and don't fit. i have steel abs man. i was looking for cantaloupe, not honeydew. >> cantaloupe doesn't get stuck and honeydew gets stuck. >> i don't eat cheese. how about a cracker? i think i'm allowed a cracker, right? cracker is not a bad thing. [ beeping ] ♪ [ bell ringing, applause ]
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>> thinking of sipping some cheap whiskey on my dirty linoleum floor.
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if you want to know why i'm telling companies to break themselves up and devoting an entire chapter to this very idea. i could explain the theory all day but why don't i show you how it's done. see this week we got the perfect objectless on in why breaking up is easy to do and insanely profitable. it doesn't cost you nearly as much -- anyway, on monday, we learned that beam, the spirits company behind jim beam maker's mark and many other brands, not to mention a stocky liked for a long time being taken over by suntory that you might remember from "lost in translation". >> for relaxing times, making suntory, paying $16 billion all together for beam. that's a 25% premium to where the stock went out on friday. now for those who don't remember, i've been recommending beam since it first came into
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existence in his current incarnation. it's been more than two years since the break-up happened and three years since it was announced and beam shareholders still being rewarded for this decision. a break-up is the gift that keeps on giving, at least when it comes to stocks. what happened to beam is the perfect illustration of why when a company decides to split itself up, you need to hold on for the ride. you may need to be patient and it may take a year or two years for the break-up to pay off. this is one area of investing where patience is unquestionably a virtue. people got tired of me for liking it, only up 11% and s&p up 32%. i could understand why something like that would have you discouraged. but if you gave up on the stock based on its period just recent
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period of lackluster performance, you would have missed the fabulous move following suntory's takeover bid. beam's stock has given you an absolutely remarkable, incredibly sweet magnificent 92% return. much better than the 64% gain the s&p 500 over the same period. but you know what, let's go back even further. let's go back even further. this whole fortune brand's break-up odyssey created wealth for viewers. i want to walk you through it step by step. this is a classic case how individual pieces can end up being worth far more, far more than the combined whole. it's a textbook example of breaking up and when i say textbook, i wrote about it in "get rich carefully."
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let's get mr. peabody in there too. we go three years ago when it was a mismatched mosaic containing golf shoes and golf clubs. one for beam, one for home furnishings and one for golf. at the time the breaking up was announced, fortune brands had an enterprise value of 13 billion plus all of the debt on the balance sheet minus cash and that is the best way to value a company. then five odd months later they sell the golf business over a billion bucks. in october 2011, the company spends off fortune home and security and renames the remainder of the business pure play liquor company beam. i recommended both stocks not long after this move because i love split-ups. how much value was created here?
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there's two ways to look at this, you can consider the enterprise value and fortune brand home security, $8 billion. add it up and the components are worth $25 billion or 12 billion more than what fort tune was worth four years ago. it nearly doubled in value or you can just look at the stocks. home and securities, 278% since the spinoff thanks to the fabulous rebound in housing the last couple of years. kitchen cabinets and faucets. beam has now rallied 92%. since investors got one share of each, you can average them. break-up produced 135% gain for shareholders. it tripled -- nearly tripled your money in slightly more than two years. either way that's an enormous amount of value creation. what's behind the break-up
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magic? as i explain in get rich carefully, wall street does not like conglomerates. it spanned multiple different sectors. they want to own pure play and it is much more likely to get support from the analyst establishment because they work by sector. let's say you have a liquor company under the same roof as home furnishing company, neither will be attractive but if you break an unwieldy company up into pure play pieces, then they will get sponsorship and portfolio managers will want to own them. that sounds like financial alchemy but it isn't. they are actually good for the fundamentals of real business. management can do a better job of focusing its resources and building a strategy that works and easier to catch a takeover when you're a smaller pure play. should you work on kitchen cabinets? all of this is exactly what we've seen with beam.
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after the break-up they were able to focus on innovation, creating new products, here i'm talking about honey, remember jack daniels has the same kind of thing. jim beam's devil cut. the devil cut of the how about red stag. that kind of thing. maker's mark 46. my staff gets me the old maker's mark. no longer be joined at the hip with a cabinet and faucet business, they have like the purchase of pin that cal doubling the vodka presence. the initial reason i recommended it, they have no family control issues or voting hurdles. it was the only stand alone liquor company that could be taken over. it was no surprise they caught a bid from suntory. here's the bottom line. do i love this stuff?
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almost as much as jagermeister. next time they announce they are going to break up or unlock a lot of value by spinning off one of its businesses, i want you to remember the mammoth profits in this week's takeover of beam. pay attention, breaking up has become a smart way for companies to create value. don't miss these very gettable gains and if you're hankering for more potential break-ups, may i suggest you pick up a copy of -- it's in plastic, "get rich carefully", i have a ton of ideas in there.
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over the pizza place on chestnut street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i-95. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪
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something has been bothering me about twitter, the negativity surrounding it versus what the stock has been doing. there have been a tremendous number of downgrades and store roared from the 40s to 70s but the 27 analyst that's follow it, nine sells, nine sells. let me tell you, i think that level of skepticism is almost unheard of unless they are a fraud. they are a real company with real revenues and real growth, just no earnings. i found my old friend jordan rohan so refreshing. in the piece entitled, why it's too early to be focused solely on valuation. basically the opportunity is to great you can't be bound up by traditional metrics, i like yelp, there's no real
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competition and it can continue to grow. in essence, we believe twitter is the most powerful flexible and disruptive of the social media platforms giving it scarcity value. saying that twitter is part of the holy trinity, a handful of get rich texts and cloud portions of the tech no logical universe. he's not saying they are going to explode. far from it. he has to use other metrics and even when he goes into that stretch, twitter is not cheap versus its peers, selling 15 times versus facebook's 8.9 times in the out years, no other group in the market trades anywhere near that level. i've been so stuck on not chasing it here. but jordan says advertisers are starting to embrace twitter in rises numbers and love the
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ungated nature. it's an open network that can go viral. and it can be used in conjunction with television. now i would still be plenty skeptical of the recommendation if it weren't for the point he then makes, a tremendous number of analysts do hate twitter. and he's saying it will not do some things but many things positive. i like his thinking. you want to know why twitter trades here. go read the report. still call me skeptic but it makes too much sense to write off twitter as too expensive. instead it makes me want to pounce on any big pullback from twitter. the problem might be others will do so too. oh, and we just might not get one any time soon. stay with us. ♪
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i know you don't want to hear this like alcoa, i'm telling you i believe intel and general electric are buys here. i think it's kind of a reset. ge is in a transition year and intel lowered expectations. i think they start creeping up
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and will be very good stocks for 2014. they may not be good stocks for tuesday, but for 2014, i think they will be. i'm jim cramer and i will see you tuesday! >> narrator: in this episode of "american greed"... stefan wilson says his investment fund is a surefire winner. >> you either work for your money, or your money works for you. >> narrator: investors even mortgage their homes to join his fund. >> he would encourage them to, as he said, unlock the dead equity in their homes. >> narrator: but investing with wilson comes at a very high price. >> it absolutely killed my grandmother. she was crying about this when her heart burst and she died. >> narrator: but first, larry salander is one of the biggest names in new york's art world. >> he was a big deal. people would look at him and say, "that's a really successful dealer." >> narrator: but collectors see red when he swipes more than $100 million from their pockets.


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